Charles Hendry MP: Why we shouldn't put a decarbonisation target in the Energy Bill this week

Charles Hendry is the MP for Wealden and is Chairman of Forewind. He is a former Energy Minister.

As we wrestle with the
joint challenges of delivering energy security in a low carbon and affordable
way, the Committee on Climate Change’s latest report is a timely reminder of
what is at stake.

To deliver on those aims,
we have to rebuild our energy infrastructure, making up for a dismal failure to
over past years secure the necessary levels of investment, and the Energy Bill,
currently before parliament, is a vital instrument in securing that investment.

One of the key decisions
for Parliament now is to decide whether we need to include a formal
decarbonisation target in the Bill. As
an enthusiastic supporter of a low-carbon economy, I don’t think we do.

The case for the target is
less about new low-carbon electricity generating plant - as there are other
specific contractual measures in the Bill to deliver this - and more about the
vital need to secure industrial jobs in the UK to build that
infrastructure.

It is good for Ministers
to challenge people to raise their aspirations and ambitions, and targets are
part of that process, but they can only be relevant if we know how to meet
them. As a Minister, I always questioned
targets where there was not a 'roadmap' for delivering them.

The challenge with a
decarbonisation target set now for 2030 is that we cannot yet know how it can
be met - or indeed, if it can be met.

Nuclear may not happen on
the scale hoped for - and it is hard to see how we can meet a decarbonisation
target without new nuclear. Some of the emerging
renewable technologies, such as offshore wind and tidal, may remain too
expensive, and we don't yet know if their costs will come down to make them
affordable for consumers. Carbon Capture
and Storage, which could give a low-carbon future for coal and gas, has yet to
be proven commercially, and we don't yet know if it would cost. Unabated gas is
relatively plentiful and is certainly lower in its carbon intensity than coal,
but on its own would not enable us to reach the low level of emissions which
the 2030 target would be likely to require.

My difficulty with the
target, therefore, is that we would be requiring it to be set without knowing
that it can be met, and that cannot be a responsible decision for government to
make, when the costs of getting it wrong would have to be picked up by
consumers for decades to come.

On the other hand, a
target could clearly help secure the industrial renaissance a low-carbon
economy could deliver. We all want to
see jobs in the construction and the supply chain come to the UK, but companies
are unlikely to invest unless they can see an order-book going well beyond 2020
and out to 2030.

Yet the decarbonisation
target does not deliver that certainty.
Certainly, it says there needs to be new plant built, but no one can
know which technology would deliver it.
Investors will still require a clearer understanding of the likely
market in the 2020s if they are to proceed, and so a clear agenda, as in the
forthcoming offshore wind industrial strategy, is actually going to be much
more important than a general amorphous target.

So whilst I understand the
ambition behind the proposed decarbonisation target, I also recognise that it
has consequences which have not yet been thought through. Ultimately, energy security and our low
carbon future depend on clarity for each technology, not on a lofty ambition
which no one knows how it can be delivered.